Business Studies · Oct / Nov 2020 · Paper 11 · Question 1

0450

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SRB is a bank which provides loans to business customers. SRB plans to make 100 managers’ jobs redundant from its 80 branches. This would remove one level of hierarchy. This is part of its 1 plan to save $1m in costs over the next 2 years. The Managing Director said: ‘SRB is working with the trade union about this plan. SRB will make more use of delegation.The bank has to respond to increased competition from online banks. SRB could either advertise more or develop new products and services.’

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1(a)[2]
Define ‘trade union’. Award 2 marks for a full definition. Award 1 mark for a partial definition. Group of workers who join together to ensure their interests are protected [2]
Organisation that represents the workers and fights for improvements to pay and conditions [2]
An organisation that exists to provide workplace support for its members [2]
Partial definition – e.g. Group of workers who join together [1]
Group of people who act together to protect their rights [1]
2 Do not award pressure group as this does not answer the question.
1(b)[2]
Define ‘level of hierarchy’ Award 2 marks for a full definition. Award 1 mark for a partial definition. Managers/supervisors/other employees who are given a similar level of responsibility in an organisation [2]
A level of authority in a business structure [2]
Partial definition e.g. People all at the same rank [1]
2 Note: To gain 2 marks the answers should show that workers are on a similar level and are within one organisation. Notes
1(c)[4]
Outline two advantages of SRB using delegation. Award 1 mark for each relevant advantage. Award 1 mark for each relevant reference to this business. Points might include:
Workload spread more evenly/reduced workload for managers [k] in its 80 branches [app]
Management can focus on more important matters [k] such as responding to increased competition [app]
Motivates employees/gives sense of responsibility [k] so less problems with trade unions [app]
Improved efficiency/better quality of work (because workers are specialised)
Career opportunities [k] as able to do similar work to the 100 managers [app]
Management can measure the success of staff more easily [k]
Can assist with training [k] Other appropriate responses should also be credited. 4 Points can relate to employees or the business. Note: To use words from the stem as application, the reference must be appropriate (i.e. make sense) in relation to the point being made. The following words are likely to be appropriate for this question:
Business customers
100 managers
80 branches
Removing one level of the hierarchy
Saving $1m in costs
Increased competition
Bank (services) or related words such as loans
Develop new products and services
Trade union Other appropriate examples in context can still be credited. Notes
1(d)[6]
Explain two factors SRB should consider when deciding which managers to make redundant. Award 1 mark for identification of each relevant factor (max 2). Award 1 mark for each relevant reference to this business (max 2). Award 1 mark for each relevant explanation (max 2). Points might include:
Importance of the role being performed [k] to maintain contact with business customers [app] to ensure good customer service [an]
Performance/experience/skills/flexibility [k] such as not able to use delegation [app] so not able to do the job required [an]
Length of time worked/redundancy costs [k] may be cheaper to choose people who have not been there for a long time [an]
Attitude/attendance/disciplinary record [k] will want to lose poor/ bad workers [an] from the 80 branches [app]
Wages/salary [k] as removing higher paid employees would help reduce costs long term [an] helping to reach the cost reduction of $1m [app]
Which departments need to lose/retain workers [k]
Number of customers [k] at the branch [app]
The number of subordinates under each manager [k] as workers may become inefficient if poorly supervised [an]
Those who volunteer [k] Other appropriate responses should also be credited. 6 Note: To use words from the stem as application, the reference must be appropriate (i.e. Make sense) in relation to the point being made. The following words are likely to be appropriate for this question:
Business customers
100 managers
80 branches
Removing one level of the hierarchy
Saving $1m in costs
Increased competition
Bank (services) / give loans
Delegation. Other appropriate examples in context can still be credited. Do not accept reduced costs alone as [k] or [an] as this is [tv]. Notes
1(e)[6]
Do you think that more advertising is a better way for a business to respond to increased competition than introducing new products? Justify your answer. Award up to 2 marks for identification of relevant issues. Award up to 2 marks for relevant development of points. Award 2 marks for justified decision as to whether more advertising is a better way for a business to respond to increased competition than introducing new products. Points might include: Advertising:
To raise awareness of its products [k] to increase revenue [an] but products might not be what customers want which will limit effectiveness [an]
No guarantee that target customers may see it [k] so sales may not rise [an]
More advertising will increase costs [k]
Widen target market/appeal to more potential customers [k] Introducing new products:
Widen target market/appeal to more potential customers [k]
May not appeal to customers [k]
High cost of development [k] which will add to expenses [an]
Allows access to new markets [k] which helps spread risk [an] and increases potential sales [an]. Other appropriate responses should also be credited. 6 This is a general question so there are no marks for application. Some points could be awarded for different options, but do not award the same point twice. For evaluation to be awarded justification will usually follow on from relevant analysis of points. For the second evaluation mark the candidate must address that there is increased competition. Notes Justification might include: Increased advertising will raise awareness of products [k] potentially increasing revenue. [an] Introducing new products might appeal to a wider target market [k] so helping to spread risk. [an] It depends on reason for increased competition, if customers dislike your products then advertising may not be effective. [eval] Developing products may be more expensive but the business could have little choice if it wants to remain competitive. [eval] Notes

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